The International Financing Corporation (IFC)’s three year leasing development program that closed its operations this week has been commended by the central bank for its achievements in various sectors of the economy.
According to the Central Bank official, in its three years of leasing operation, IFC has sensitized the public, trained in legal and regulatory framework as well as taxation.
“As a result of the leasing project, several areas have benefited which include transport that accounts for 62 percent, manufacturing accounting for 12 percent,” said Ambassador Claver Gatete, the Deputy Governor of central bank.
Leasing comes as another option of increasing private sector financing and together with banks have a crucial role in financing the private sector.
In 2009, the private sector financing stood at Rwf198 billion while by end of May this year it stood at Rwf100 billion a sign that it will increase this year.
Gatete, urged the public to embrace the leasing system since it does not need collateral although a minimum guarantee is needed and not much information needed for credit history.
“Some financial institutions are and should look at the experiences of other countries such as Mauritius, Tunisia and Morocco which have registered success in the leasing sector,” explained Gatete.
Mauritius has managed to raise $500 million for leasing while Tunisia has raised $1billion but Rwanda is still at $30 million.
However, Rwanda’s leasing industry is expected to grow from $30 million (Rwf17.5 billion) in 2010 to $60 million(Rwf35.1 billion) next year.
Leasing as a financing vehicle will promote foreign capital investment especially long term capital which will help solve the structural mismatch between short term deposits and the need for long term resources.